Q4 – 2017

Interim report January – December 2017 Contents

Highlights and Group performance 1 Outlook for 2018 1

Interim report 5 Telenor’s operations 5 Group performance 11

Interim condensed financial information 14 Notes to the interim consolidated financial statements 19

Definitions 24 TELENOR FOURTH QUARTER 2017 1

In 2017, Telenor delivered a solid set of results due to strong execution from across the company and continued follow-through on efficiency measures and our strategy. We met our financial targets and reported strong financial results for the past year, marked by a 1% organic increase in revenues and total net cost reductions of NOK 1.6 billion, leading to increased profitability and cash flow of NOK 25 billion.

During the fourth quarter, we saw continued subscription and traffic revenue growth and solid EBITDA uptake, on an organic basis. We achieved cost savings of NOK 0.6 billion during the final three months of the year, reported an EBITDA margin of 37% and added two million new mobile customers.

We enter 2018 with clear priorities to deliver on our digital transformation agenda, to continue to seek efficiency gains and revenue growth, while simplifying our portfolio and way of work across the company. Change starts with people, and in order to succeed with our transformation, we will continue to invest in our teams. We seek to personalise our customers’ experience and improve satisfaction based on their needs and preferences. Telenor aims to create value by becoming even more efficient in how we operate, how we deliver our services and how customers experience us through the digitalisation of IT and technology and our customer journeys. We are proud to connect our 178 million customers to what matters most to them. We truly believe that connected societies are empowered societies.

– Sigve Brekke, President and CEO

Key figures Telenor Group

Fourth quarter Year (NOK in millions) 2017 2016 2017 2016 Revenues 32 093 31 727 124 756 125 395 Organic revenue growth (%) (0.5) 0.6 0.7 0.8 Organic subscription and traffic revenue growth (%) 2.6 0.8 2.2 1.9 EBITDA before other income and other expenses 11 835 10 649 48 992 45 966 EBITDA before other income and other expenses/Revenues (%) 36.9 33.6 39.3 36.7 Net income attributable to equity holders of Telenor ASA 2 226 2 286 11 983 2 832 Capex excl. licences and spectrum/Revenues (%) 17.1 21.3 14.6 17.4 Capex/Revenues (%) 19.2 21.3 17.1 20.2 Free cash flow 3 327 1 509 24 867 10 300 Mobile subscriptions - Change in quarter/Total (mill.) 2.0 4.0 178 170

With effect from the first quarter 2017, Telenor India is treated as an asset held for sale and discontinued operations in Telenor’s financial reporting.

Fourth quarter 2017 summary Shareholder remuneration • Total reported revenues increased by 1% to NOK 32.1 billion. On an • Based on the performance during the year, the Board of Directors organic basis, revenues dropped 0.5%, while subscription and traffic proposes a dividend of NOK 8.10 for 2017, to be declared by the revenues rose by 3%, positively impacted by a negative one-time Annual General Meeting (AGM) on 2 May 2018. The dividend shall be item in Sweden last year. split into two tranches of NOK 4.20 and NOK 3.90 per share, to be paid • Currency adjusted opex decreased by NOK 0.6 billion, or 5%. in May and November 2018 respectively. • EBITDA before other items was NOK 11.8 billion, corresponding to an • The 2017 buyback programme is expected to be completed by the EBITDA margin of 37%, an increase of 3 percentage points from last end of February 2018. The company plans to ask the AGM for a new year. buyback mandate to secure flexibility for additional shareholder • Net income attributable to equity holders of Telenor ASA was NOK remuneration. 2.2 billion, or NOK 1.5 earnings per share. Adjusted for impairment in Tapad of NOK 1.7 billion and reversal of impairment of NOK 1.2 billion Outlook* in Denmark, net income was NOK 2.6 billion. • Capex excluding spectrum and licences was NOK 5.5 billion, resulting • For 2018, we expect an organic subscription and traffic revenue in a capex to sales ratio of 17%. growth of 1-2%, an organic EBITDA growth of 1-3% and capex • Free cash flow for the quarter was NOK 3.3 billion. excluding licences and spectrum of NOK 18-19 billion.

* Subscription & traffic revenues from mobile, fixed and TV services, incl Canal Digital DTH. Org. revenue growth in fixed currency, adj. for acquisitions and disposals. EBITDA before other items. Capex excl. spectrum and licence fees. Group structure and accounting standard as of 31 December 2017. 2 TELENOR FOURTH QUARTER 2017

Group performance in the fourth quarter 20171)

REVENUES Revenues Revenues Reported revenues increased by 1% to NOK 32.1 billion. On an organic 50 125.4 124.8 70 basis, revenues were slightly negative. This was primarily a result of 50 125.4 124.8 70 reduction in low margin revenues from reduced handset sale and loss5040 of 125.4 124.8 7056 31.7 31.5 32.1 revenues in our international carrier business. The growth momentum40 in 30.5 30.7 56 4030 31.7 31.5 32.1 5642 Bangladesh continues this quarter, but also Pakistan and Hungary are 31.7 30.5 30.7 30 30.5 31.5 30.7 32.1 42 performing well. Furthermore, we see positive contribution from growth3020 4228 within fixed Internet and TV in Sweden and Norway. Organic subscription 20 28 10 14 and traffic revenues increased by 3%, positively impacted by a negative20 -0.5% 0.7% 28 one-time item in Sweden last year. 10 NOK billion 14 100 -0.5% 0.7% 140 -0.5% 0.7% Q4 Q1 Q2 Q3 Q4 2016 2017 NOK billion 0 2016 2017 2017 2017 2017 NOK billion 0 Full year reported revenues decreased by 1% as currency effects 0 Q4 Q1 Q2 Q3 Q4 2016 2017 0 impacted revenues negatively by NOK 1.8 billion. Organic revenues grew 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2016 2017 2016 2017 2017 2017 2017 by 1%, which was to a large extent a result of higher subscription and traffic revenues, which grew by 2%. Organic growth Organic growth Organic growth

Opex OPERATING EXPENDITURES (OPEX) Opex 46.9 20 44.7 30 Currency adjusted opex decreased by NOK 0.6 billion as our efficiency 46.9 20 46.9 44.7 2530 agenda is yielding good results across the Group. The cost reductions2015 44.7 30 were most notable in Thailand, Sweden and Pakistan. 12.1 2025 15 11.4 11.2 11.6 25 15 10.5 10 12.1 11.4 11.2 11.6 1520 Full year reported opex decreased by NOK 2.2 billion to NOK 44.7 billion, 12.1 11.4 11.2 10.5 11.6 20 10 10.5 15 of which NOK 0.6 billion was related to positive currency development. 10 105 15 On a currency adjusted basis, opex decreased by 3%. We see positive 105 5 10 efficiency effects across the board, but the largest opex reductions were5 NOK billion 5 0 50 attributable to Thailand, Norway, Sweden and Pakistan. Q4 Q1 Q2 Q3 Q4 2016 2017 NOK billion 0 2016 2017 2017 2017 2017 NOK billion 0 0 Q4 Q1 Q2 Q3 Q4 2016 2017 0 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2016 2017 2016 2017 2017 2017 2017

EBITDA EBITDA BEFORE OTHER INCOME AND OTHER EXPENSES (EBITDA)EBITDA 49.0 15 25 12.7 13.0 46.0 49.0 EBITDA was NOK 11.8 billion, an improvement of 11% on an organic 15 11.5 11.8 49.0 25 15 10.6 12.7 13.0 46.0 2520 basis. The increase was equally driven by continued growth in mobile 11.5 12.7 13.0 11.8 46.0 10 10.6 11.5 11.8 20 subscription and traffic revenues and opex reductions. The development 10.6 2015 10 was also positively impacted by a decision from the Swedish tax 10 15 1510 authorities last year. Adjusted for this effect, the growth was 9%. The 5 EBITDA margin increased by 3 percentage points, closing the quarter at 10 5 105 37%. 5 11.0% 8.8% NOK billion 5 0 11.0% 8.8% 50 11.0% 8.8% Q4 Q1 Q2 Q3 Q4 2016 2017 NOK billion Full year reported EBITDA increased by NOK 3.0 billion to NOK 49.0 0 2016 2017 2017 2017 2017 NOK billion 0 billion, negatively impacted by currency effects of NOK 0.9 billion. 0 Q4 Q1 Q2 Q3 Q4 2016 2017 0 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2016 2017 Organic EBITDA increased by 9%, to which Bangladesh, Pakistan, 2016 2017 2017 2017 2017 Sweden and Thailand were the main contributors. Organic growth Organic growth Organic growth

Capex 1) The comments are related to Telenor’s development in the fourth quarter of 2017Capex compared to the fourth quarter of 2016 unless otherwise stated. Please refer to Definitions on page 24 for descriptions of alternative performance measures. Capex 25.3 15 17,000000 80 25.3 15 25.3 14,16666717,000000 80 15 21.3 17,000000 8060 14,166667 10 21.3 14,16666711,333333 21.3 60 10 6.8 11,333333 60 10 6.2 11,3333338,500000 40 5.6 5.0 5 6.8 4.5 6.2 5,6666678,500000 40 6.8 5.6 6.2 8,500000 40 4.5 5.6 5.0 20 5 21% 4.5 5.0 20% 2,8333335,666667 5 15% 18% 16% 19% 17% 5,666667 20 21% 20% NOK billion 2,833333 20 0 21% 15% 18% 16% 19% 17% 2,8333330,000000 0

20% NOK billion Q4 15%Q1 18%Q2 16%Q3 Q419% 2016 201717% 0 2016 2017 2017 2017 2017 NOK billion 0,000000 0 0 Q4 Q1 Q2 Q3 Q4 2016 2017 0,000000 0 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2016 2017 2016 2017 2017 2017 2017 Capex Capex/Sales Capex Capex/Sales Capex Capex/Sales

Net income Net income Net income 12.0 12.0 12.0 8,333333 6,6666678,333333 5.8 8,3333335,0000006,666667 4.2 5.8 5.8 2.8 6,6666673,3333335,000000 2.3 4.2 2.2 5,0000001,666667 4.2 2.8 3,333333 2.3 2.2 2.8 NOK billion 2.2 3,3333330,0000001,666667 2.3 1,666667 -0.2 NOK billion -1,6666670,000000 NOK billion -3,3333330,000000 -0.2 -1,666667 -0.2 -1,666667-5,000000-3,333333 -3,333333 Q4 Q1 Q2 Q3 Q4 2016 2017 -5,000000 2016 2017 2017 2017 2017 -5,000000 Q4 Q1 Q2 Q3 Q4 2016 2017 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2016 2017 2016 2017 2017 2017 2017

Free cash flow Free cash flow

24.9 25 24.9 25 24.9 2520 20 2015 15 9.9 9.4 10.3 1510 9.9 9.4 10.3 10 9.9 9.4 10.3 105 3.3 1.5 2.2 5 3.3 NOK billion 50 1.5 2.2 3.3 1.5 2.2 NOK billion 0 Q4 Q1 Q2 Q3 Q4 2016 2017NOK billion 0 2016 2017 2017 2017 2017 Q4 Q1 Q2 Q3 Q4 2016 2017 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2016 2017 2016 2017 2017 2017 2017

Mobile Mobile Mobile 177,8 175.8 175,00 173.9 177,8 60 172.0 175.8 177,8 214 173.9 211 211 175,00 169.8 175.8 60 208 175,00 172.0 173.9 60 214 168,75 169.8 172.0 203 211 211 214 169.8 208 211 211 168,75 203 208 168,75162,50 40 203 162,50 52% 52% 40 162,50156,25 50% 50% 50% 40 52% 52% 50% 50% 50% 52% 52% 156,25 50% 50% 50% 156,25150,00 20 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 150,00 2016 2017 2017 2017 2017 20 2015 2016 2016 2016 2016 150,00 Q4 Q1 Q2 Q3 Q4 20 Q4 Q1 Q2 Q3 Q4 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2016Mobile subscriptions2017 2017 of which2017 active data 2017users (%) 2015 2016 2016 2016 2016 Mobile subscriptions of which active data users (%) Mobile subscriptions of which active data users (%) Revenues RevenuesRevenues

50 125.4 124.8 70 50 125.4 124.8 70 50 125.4 124.8 70 40 56 40 31.7 30.5 31.5 30.7 32.1 56 40 31.7 31.5 32.1 56 30 31.7 30.5 31.5 30.7 32.1 42 30 30.5 30.7 42 30 42 20 28 20 28 20 28 10 14 10 -0.5% 0.7% 14

10 -0.5% 0.7% NOK billion 14 -0.5% 0.7% 0 NOK billion 0 0 NOK billion 0 0 Q4 Q1 Q2 Q3 Q4 2016 2017 0 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2016 2017 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2016 2017 2016 2017 2017 2017 2017

Organic growth Organic growth Organic growth

Opex OpexOpex 46.9 20 46.9 44.7 30 20 46.9 44.7 30 20 44.7 2530 15 25 15 12.1 2025 15 12.1 11.4 11.2 11.6 12.1 11.4 11.2 10.5 11.6 20 10 11.4 11.2 10.5 11.6 1520 10 10.5 15 10 1015 5 10 5 105 5 5 NOK billion 5 0 NOK billion 0 0 NOK billion 0 0 Q4 Q1 Q2 Q3 Q4 2016 2017 0 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2016 2017 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2016 2017 2016 2017 2017 2017 2017

EBITDA EBITDAEBITDA

49.0 15 49.0 25 15 12.7 13.0 46.0 49.0 25 15 46.0 25 11.5 12.7 13.0 11.8 46.0 10.6 11.5 12.7 13.0 11.8 20 10.6 11.5 11.8 20 10 10.6 20 10 15 10 15 15 10 5 10 5 10 5 5 11.0% 8.8% 5

11.0% 8.8% NOK billion 5 11.0% 8.8% 0 NOK billion 0 0 Q4 Q1 Q2 Q3 Q4 2016 2017 NOK billion 0 0 2016Q4 2017Q1 2017Q2 2017TELENORQ3 2017 FOURTHQ4 QUARTER2016 2017 2017 3 0 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2016 2017 2016 2017 2017 2017 2017

Organic growth Organic growth Organic growth

CAPITAL EXPENDITURES (CAPEX) Capex CapexCapex Capex was NOK 6.2 billion, to which continued network expansion in 25.3 15 25.3 17,000000 80 Norway and Thailand were still the primary drivers. Capex for the quarter15 25.3 17,000000 80 15 17,000000 80 includes NOK 0.7 billion from the acquisition of 2x10MHz in the 1800 14,166667 21.3 14,166667 21.3 14,166667 60 MHz spectrum band in Myanmar. 10 21.3 11,333333 60 10 11,333333 60 10 11,333333 6.8 6.2 8,500000 40 Full year capex decreased by NOK 4.1 billion to NOK 21.3 billion. 6.8 5.6 8,500000 40 6.8 5.0 6.2 8,500000 40 The reduction was primarily explained by higher network expansion 5 4.5 5.6 5.0 6.2 5,666667 5 4.5 5.6 5.0 5,666667 5 4.5 5,666667 20 investments last year. During the year, NOK 3.1 billion was invested in 21% 20% 2,833333 20 15% 18% 16% 19% 17% 20 21% 20% NOK billion 2,833333 spectrum and licences. 21% 15% 18% 16% 19% 20% 17% 2,833333 0 15% 18% 16% 19% 17% NOK billion 0,000000 0 0 NOK billion 0,000000 0 0 Q4 Q1 Q2 Q3 Q4 2016 2017 0,000000 0 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2016 2017 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2016 2017 2016 2017 2017 2017 2017 Capex Capex/Sales Capex Capex/Sales Capex Capex/Sales

Net income NET INCOME NetNet incomeincome 12.0 12.0 12.0 Reported net income to equity holders of Telenor ASA in the fourth quarter was NOK 2.2 billion, which is on level with last year. Improved8,333333 8,333333 operating profit was offset by reversal of VEON impairment last8,3333336,666667 year. 5.8 6,666667 5.8 6,6666675,000000 4.2 5.8 5,000000 4.2 2.8 5,0000003,333333 2.3 4.2 2.2 2.8 Year to date, the net income to equity holders of Telenor ASA was3,333333 NOK 2.3 2.2 2.8 3,3333331,666667 2.2 2.3 NOK billion 12.0 billion, compared to 2.8 billion last year. Net income for both1,666667 2017 1,6666670,000000 NOK billion and 2016 were impacted by effects related to the disposal of shares0,000000 in NOK billion -1,6666670,000000 -0.2 -1,666667 -0.2 VEON and the sale of Telenor India. The improvement in net income-1,666667-3,333333 in -0.2 -3,333333 2017 was primarily a result of lower losses from discontinued operations-3,333333-5,000000 -5,000000 Q4 Q1 Q2 Q3 Q4 2016 2017 of NOK 7.4 billion and improved operating profit of NOK 2.4 billion.-5,000000 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2016 2017 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2016 2017 2016 2017 2017 2017 2017

FreeFree cashcash flowflow FREE CASH FLOW Free cash flow

24.9 Free cash flow in the fourth quarter was NOK 3.3 billion. This is an 25 24.9 25 24.9 increase of NOK 1.8 billion from last year. Improved EBITDA and 25 20 lower spectrum payments were partly offset by higher tax and capex 20 20 payments. 15 15 15 9.9 9.4 10.3 Full year free cash flow amounts to NOK 24.9 billion, which is an increase10 9.9 9.4 10.3 10 9.9 9.4 10.3 of NOK 14.6 billion compared to last year. This is mainly a result of 10 5 3.3 higher EBITDA, lower capex and spectrum payments and proceeds from5 1.5 2.2 3.3 5 1.5 2.2 3.3 NOK billion the online classifieds transaction, as well as the acquisition of Tapad in0 1.5 2.2 NOK billion 0 NOK billion the previous year. 0 Q4 Q1 Q2 Q3 Q4 2016 2017 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2016 2017 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2016 2017 2016 2017 2017 2017 2017

Mobile MobileMobile 177,8 177,8 175.8 177,8 175,00 173.9 175.8 60 175,00 172.0 173.9 175.8 60 214 175,00 169.8 172.0 173.9 60 211 211 214 172.0 208 211 211 214 169.8 208 211 211 168,75 169.8 203 208 168,75 203 168,75 203 162,50 40 162,50 40 162,50 40 52% 52% 156,25 50% 50% 50% 52% 52% 156,25 50% 50% 50% 52% 52% 156,25 50% 50% 50% 150,00 20 150,00 Q4 Q1 Q2 Q3 Q4 20 Q4 Q1 Q2 Q3 Q4 150,00 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 20 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2016 2017 2017 2017 2017 2015 2016 2016 2016 2016 Mobile subscriptions of which active data users (%) Mobile subscriptions of which active data users (%) Mobile subscriptions of which active data users (%) Revenues

50 125.4 124.8 70

40 56 31.7 30.5 31.5 30.7 32.1 30 42

20 28

10 14 -0.5% 0.7% NOK billion 0 0 Q4 Q1 Q2 Q3 Q4 2016 2017 2016 2017 2017 2017 2017

Organic growth

Opex

46.9 20 44.7 30 25 15 12.1 11.4 11.2 11.6 20 10.5 10 15 10 5 5 NOK billion 0 0 Q4 Q1 Q2 Q3 Q4 2016 2017 2016 2017 2017 2017 2017

EBITDA

49.0 15 25 12.7 13.0 46.0 11.5 11.8 10.6 20 10 15

10 5 5 11.0% 8.8% NOK billion 0 0 Q4 Q1 Q2 Q3 Q4 2016 2017 2016 2017 2017 2017 2017

Organic growth

Capex

25.3 15 17,000000 80 14,166667 21.3 60 10 11,333333

6.8 6.2 8,500000 40 5.6 5.0 5 4.5 5,666667 20 21% 20% 2,833333 15% 18% 16% 19% 17% NOK billion 0 0,000000 0 Q4 Q1 Q2 Q3 Q4 2016 2017 2016 2017 2017 2017 2017

Capex Capex/Sales

Net income

12.0

8,333333 6,666667 5.8 5,000000 4.2 2.8 3,333333 2.3 2.2 1,666667 NOK billion 0,000000 -1,666667 -0.2 -3,333333 -5,000000 Q4 Q1 Q2 Q3 Q4 2016 2017 2016 2017 2017 2017 2017

Free cash flow

24.9 25

20

15 9.9 9.4 10.3 10

5 3.3 1.5 2.2 NOK billion 4 TELENOR FOURTH QUARTER 2017 0 Q4 Q1 Q2 Q3 Q4 2016 2017 2016 2017 2017 2017 2017

MOBILE SUBSCRIPTIONS Mobile

The number of mobile subscriptions increased by 2 million during the 177,8 quarter, raising the total subscription base to 178 million. The main 175.8 175,00 173.9 60 contributors to the subscription growth was Bangladesh and Pakistan, 172.0 214 211 211 adding 1.5 million and 0.9 million respectively. This increase was partly 169.8 208 offset by a subscription loss of 0.5 million in Thailand. During the year,168,75 203 the subscription base has increased by 8 million or 5%. The share of active data users in our subscription base remained stable at 52%162,50 from 40 previous quarter. 52% 52% 156,25 50% 50% 50%

150,00 20 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2016 2017 2017 2017 2017 2015 2016 2016 2016 2016

Mobile subscriptions of which active data users (%) TELENOR FOURTH QUARTER 2017 5

Norway Interim report Fourth quarter Year 2017 2016 2017 2016 (NOK in millions) Restated* Restated* Telenor’s operations Revenues mobile operation Subscription and traffic 2 746 2 774 11 030 11 288 The comments below are related to Telenor’s Interconnect revenues 139 141 551 585 development in the fourth quarter of 2017 compared Other mobile revenues 270 267 1 138 1 064 to the fourth quarter of 2016 in local currency, Non-mobile revenues 823 701 2 314 2 114 unless otherwise stated. Telenor India is classified Total revenues mobile operation 3 978 3 883 15 033 15 052 as a discontinued operation, see note 2 for further information. Financial figures for several segments Revenues fixed operation have been restated. See note 10 for further Telephony 348 428 1 498 1 806 information. All comments on EBITDA are made on Internet and TV 1 507 1 408 5 851 5 446 development in EBITDA before other income and other Data services 132 127 504 503 expenses. Please refer to page 11 for ‘Specification Other fixed revenues 413 483 1 603 1 715 of other income and other expenses’. Additional Total retail revenues 2 401 2 446 9 456 9 470 information is available at www.telenor.com/ir Wholesale revenues 345 368 1 437 1 508 Total revenues fixed operation 2 745 2 814 10 893 10 978 Total revenues 6 723 6 697 25 926 26 030

Operating expenditures 2 368 2 445 9 171 9 493 EBITDA before other items 2 723 2 643 11 114 10 946 Operating profit 1 484 1 360 6 903 6 726

EBITDA before other items/ Total revenues (%) 40.5 39.5 42.9 42.1 Capex 1 096 1 512 4 987 4 780 Investments in businesses 4 - 215 100

Statistics (monthly in NOK): Mobile ARPU 322 316 320 319 Fixed Telephony ARPU 242 257 246 259 Fixed Internet ARPU 379 361 369 352 TV ARPU 320 292 312 284

No. of subscriptions - Change in quarter/Total (in thousands): Mobile (10) (15) 2 984 3 066 Fixed telephony (20) (18) 472 546 Fixed Internet (4) 5 859 865 TV - 7 546 541 * Refer to note 10.

• Norway delivered another strong quarter driven by continued growth in fixed broadband and TV revenues, mobile upselling and cost re- ductions. • Growth in postpaid subscriptions this quarter was offset by contin- ued reduction in prepaid subscriptions and stand-alone data cards. The number of mobile subscriptions decreased by 3% from last year. • Mobile ARPU increased by 2% as migration to higher data bundles more than offset the decline in roaming revenues. Mobile subscrip- tion and traffic revenues decreased by 1% as the higher ARPU was offset by a lower subscription base. • A 7% increase in revenues from fixed internet and TV was more than offset by declining demand for traditional telephony and wholesale products, as well as a drop in low margin equipment sale. Fibre con- nections increased by 12,000 in the quarter, taking the total number of high-speed subscribers to 631,000. • Opex decreased by 3% mainly due to workforce reductions and lower sales and marketing costs, partly offset by the inclusion of UCOM, the business sales channel company acquired in September. On an organic basis, the reduction was 5%. • EBITDA increased by 3% and the EBITDA margin increased by 1 per- centage point to 41%. • Capex continued to be driven by fibre roll-out and expansion of the 4G network. The 4G network includes 6,856 sites, and has now reached 99% population coverage. 6 TELENOR FOURTH QUARTER 2017

Sweden Denmark Fourth quarter Year Fourth quarter Year 2017 2016 2017 2016 2017 2016 2017 2016 (NOK in millions) Restated* Restated* (NOK in millions) Restated* Restated* Revenues mobile operation Revenues mobile operation Subscription and traffic 1 557 1 235 6 123 5 926 Subscription and traffic 743 700 2 903 2 907 Interconnect revenues 137 126 596 557 Interconnect revenues 68 68 256 244 Other mobile revenues 102 86 379 351 Other mobile revenues 49 43 199 169 Non-mobile revenues 735 822 2 219 2 256 Non-mobile revenues 388 355 1 251 1 164 Total revenues mobile operation 2 531 2 269 9 317 9 090 Total revenues mobile operation 1 248 1 166 4 610 4 484 Revenues fixed operation Revenues fixed operation Telephony 66 75 285 346 Telephony 34 40 144 156 Internet and TV 706 637 2 660 2 492 Internet and TV 92 97 367 398 Data services 53 38 201 171 Data services 6 6 26 26 Other fixed revenues 113 25 303 97 Other fixed revenues - - - - Total retail revenues 938 775 3 448 3 106 Total retail revenues 132 143 537 580 Wholesale revenues 46 46 172 188 Wholesale revenues - - - 4 Total revenues fixed operation 984 821 3 620 3 294 Total revenues fixed operation 132 143 537 584 Total revenues 3 514 3 090 12 938 12 384 Total revenues 1 380 1 309 5 147 5 068

Operating expenditures 1 076 1 118 4 211 4 375 Operating expenditures 590 526 2 136 2 333 EBITDA before other items 1 066 615 4 136 3 538 EBITDA before other items 148 184 849 609 Operating profit 727 43 2 730 1 759 Operating profit 1 216 56 1 665 152

EBITDA before other items/ EBITDA before other items/ Total revenues (%) 30.3 19.9 32.0 28.6 Total revenues (%) 10.7 14.0 16.5 12.0 Capex 611 586 1 690 1 560 Capex 160 47 651 531 Investments in businesses - - 113 - Mobile ARPU - monthly (NOK) 148 143 144 147

Statistics (monthly in NOK): No. of subscriptions - Change in quarter/Total (in thousands): Mobile ARPU 210 177 210 210 Mobile 1 44 1 827 1 820 Fixed Telephony ARPU 64 67 67 75 Fixed telephony (1) - 64 74 Fixed Internet ARPU 217 205 213 216 Fixed Internet (3) (2) 138 149 TV ARPU 147 122 139 122 Exchange rate (DKK) 1.2539 1.2476 No. of subscriptions - Change in quarter/Total (in thousands): * Refer to note 10. Mobile 7 34 2 689 2 624 Fixed telephony (9) (7) 185 215 • The turnaround programme in Denmark resulted in a solid performance Fixed Internet (1) 6 679 657 improvement in 2017, in a market that continues to be very TV (5) (21) 470 469 competitive. • The number of mobile subscriptions was 1.8 million, slightly up from the end of last year. Exchange rate (SEK) 0.9680 0.9814 • Total revenues remained stable as higher handset sales offset lower * Refer to note 10. fixed revenues. Mobile subscription and traffic revenues remained stable, as improved performance in the consumer segment offset price • The development from last year is positively impacted by VAT items in pressure in the business segment and reduced roaming charges. the fourth quarter of 2016. The comments below are adjusted for these • The EBITDA margin decreased by 3 percentage points to 11%. effects, which amount to NOK 203 million on mobile revenues and NOK Temporary higher cost in the fourth quarter was explained by a 48 million on operating expenditures. combination of seasonally higher sales- and marketing spend and • Telenor Sweden had another strong quarter with continued revenue projects preparing improved customer solutions and regulatory growth combined with further cost reductions. requirements. • The mobile subscription base continued to grow to a total of 2.7 million, • Increased operating profit was primarily a result of reversal of write- 2% above the same period last year. 10,000 fibre connections were down of NOK 1.2 billion. See note 4 for further details. added this quarter, taking the total number of high speed fixed internet • Capex were primarily related to the mobile network, transmission and IT. subscriptions to 580,000. • Mobile subscription and traffic revenues increased by 2%, as the larger customer base more than offset the negative impact from roaming. • Fixed revenues increased by 14% from continued strong growth in high speed internet and the inclusion of the acquired system integrator Network Services Nordic AB. On an organic basis, fixed revenues increased by 5%. • Opex decreased 7% organically, mainly due to fewer employees, reduction in retail sales points and lower commissions. Consequently, EBITDA increased by 16% and the EBITDA margin increased by 4 percentage points to 31%. • Capex was mainly related to fibre roll-out, IT modernisation and mobile network capacity enhancement. TELENOR FOURTH QUARTER 2017 7

Hungary • In Bulgaria we continue to see solid momentum on cost reductions. Fourth quarter Year • Mobile subscriptions decreased by 80.000 driven by a combination (NOK in millions) 2017 2016 2017 2016 of seasonal churn and continued market decline within prepaid Revenues subscriptions. The subscription base was 8% lower than last year. • Total revenues decreased by 1% as lower mobile subscription and Subscription and traffic 954 863 3 686 3 561 traffic revenues were partly offset by increased handset revenues. Interconnect revenues 75 67 278 269 Mobile subscription and traffic revenues decreased as higher ARPU Other mobile revenues 27 19 100 80 did not compensate for the lower number of subscribers, especially Non-mobile revenues 180 146 570 526 within prepaid. Total revenues 1 237 1 094 4 634 4 436 • EBITDA decreased by 10% as an opex reduction of 7% was more than offset by lower revenues and increased roaming cost following Operating expenditures 400 405 1 500 1 576 roaming regulation. EBITDA before other items 341 294 1 503 1 369 Operating profit 190 171 951 773 Montenegro & Serbia Fourth quarter Year

EBITDA before other items/ 2017 2016 2017 2016 Total revenues (%) 27.6 26.9 32.4 30.9 (NOK in millions) Restated* Restated* Revenues Capex 88 163 309 390 Subscription and traffic 640 595 2 501 2 486 Interconnect revenues 172 174 630 752 No. of subscriptions - Change in quarter/ Total (in thousands): 43 (41) 3 125 3 148 Other mobile revenues 20 17 96 106 ARPU - monthly (NOK) 111 98 106 101 Non-mobile revenues 217 136 676 491 Exchange rate (HUF) 0.0302 0.0298 Total revenues 1 049 924 3 903 3 835

• Hungary sees a strong performance this quarter, with a solid revenue Operating expenditures 263 259 997 1 039 growth on top of significant cost reductions. EBITDA before other items 357 306 1 456 1 395 • The number of mobile subscriptions increased by 43,000 driven Operating profit 217 168 909 883 by strong consumer postpaid uptake and prepaid growth. The subscription base was 1% lower than last year due to the reduction EBITDA before other items/ in the prepaid segment. Total revenues (%) 34.0 33.1 37.3 36.4 • Total revenues increased by 7%, driven by higher ARPU from Capex 98 145 321 490 continued upselling within the consumer postpaid segment and migration from prepaid to postpaid. Mobile subscription and traffic No. of subscriptions - Change in quarter/ revenues improved by 5%. Total (in thousands): (135) (148) 3 166 3 339 • As a result of the revenue growth combined with a 6% opex ARPU - monthly (NOK) 84 75 80 79 reduction, EBITDA increased by 9%. Exchange rate (RSD) 0.0767 0.0755 Exchange rate (EUR) 9.3271 9.2889 Bulgaria * Refer to note 10. Fourth quarter Year (NOK in millions) 2017 2016 2017 2016 • In Montenegro and Serbia we continue to see results of solid Revenues execution on cost efficiency initiatives. Subscription and traffic 591 576 2 287 2 297 • The number of mobile subscriptions decreased by 135,000, driven Interconnect revenues 69 68 261 269 by seasonal churn and an overall declining trend in the prepaid Other mobile revenues 11 8 54 42 segment. At the end of fourth quarter, the subscription base was 5% Non-mobile revenues 201 175 618 560 lower than at the same period last year. Total revenues 871 827 3 220 3 168 • Total revenues increased by 4% driven by increased handset sale, partly offset by reduced interconnect and mobile subscription and Operating expenditures 264 268 996 1 040 traffic revenues. There was a significant increase in sale of handsets on instalment plans, shifting revenues from mobile subscription and EBITDA before other items 276 287 1 179 1 191 traffic revenues to handset revenues. Operating profit 137 150 598 616 • EBITDA increased by 6% driven by continued strong focus on operational efficiency, resulting in a solid 7% opex reduction. EBITDA before other items/ Total revenues (%) 31.7 34.6 36.6 37.6 Capex 106 154 221 320

No. of subscriptions - Change in quarter/ Total (in thousands): (80) (111) 3 153 3 429 ARPU - monthly (NOK) 69 62 65 61 Exchange rate (BGN) 4.7689 4.7494 8 TELENOR FOURTH QUARTER 2017

dtac - Thailand • In Malaysia, postpaid revenues continued to grow, despite continued Fourth quarter Year challenging market conditions. Within prepaid, the performance was (NOK in millions) 2017 2016 2017 2016 in line with previous quarter, as reduced subscriber base was offset Revenues by higher ARPU. • The subscriber development trend continued this quarter with Subscription and traffic 3 980 3 756 15 620 15 237 postpaid growth of 0.1 million, more than offset by prepaid decline Interconnect revenues 208 259 841 1 085 of 0.2 million. The total subscription base ended 5% lower than last Other mobile revenues 46 37 184 174 year. Non-mobile revenues 799 1 035 2 444 3 151 • The decline in mobile subscription and traffic revenues eased Total revenues 5 033 5 086 19 089 19 647 somewhat this quarter to 2%, but is still under pressure from a lower prepaid base. Postpaid revenues increased by 13%, driven by the Operating expenditures 1 763 1 828 6 969 7 404 higher number of subscriptions. EBITDA before other items 1 938 1 599 7 413 6 645 • EBITDA declined by 2% driven by reduced mobile subscription and traffic revenues and higher device subsidies, partly offset by cost Operating profit 229 129 1 086 1 160 reductions. • Capex for the quarter was prioritised towards 4G expansion. The EBITDA before other items/ population coverage on 4G reached 87%, with 4G+ now covering Total revenues (%) 38.5 31.4 38.8 33.8 55% of the population. Capex 1 088 1 413 4 027 4 835

Grameenphone - Bangladesh No. of subscriptions - Change in quarter/ Total (in thousands): (460) (340) 22 652 24 480 Fourth quarter Year ARPU - monthly (NOK) 61 55 58 54 (NOK in millions) 2017 2016 2017 2016 Exchange rate (THB) 0.2435 0.2381 Revenues Subscription and traffic 2 883 2 770 11 748 10 725 • In Thailand, mobile subscription and traffic revenues returned to Interconnect revenues 210 231 882 992 growth this quarter as a result of continued migration of customers Other mobile revenues 5 9 14 30 from prepaid to postpaid and improved postpaid ARPU. Non-mobile revenues 92 185 512 592 • Total revenues declined by 5%, mainly as a result of reduced sale of Total revenues 3 190 3 194 13 156 12 339 handsets and lower interconnect revenues. • The total number of subscriptions decreased by 0.5 million, as the Operating expenditures 1 090 1 142 4 310 4 368 growth in postpaid subscriptions was not sufficient to offset the EBITDA before other items 1 876 1 752 7 791 6 829 decline in the prepaid segment. During the year, the subscription Operating profit 1 134 1 143 5 124 4 451 base declined by 8%. • Opex declined by 8% primarily due to lower regulatory cost and reduced commissions. EBITDA before other items/ Total revenues (%) 58.8 54.9 59.2 55.3 • The EBITDA margin improved by 7 percentage points, closing at 38%. The margin expansion was a result of higher mobile subscription and Capex 470 567 1 483 2 259 traffic revenues, improved device margin, reduced regulatory cost Investments in businesses 19 - 19 - and solid cost control. • Capital expenditure was prioritised towards improving the No. of subscriptions - Change in quarter/ densification of 4G and 3G networks. In 2017, 9,580 new sites were Total (in thousands): 1 446 2 939 65 329 57 954 added. ARPU - monthly (NOK) 16 18 17 17 Exchange rate (BDT) 0.1022 0.1071 Digi - Malaysia Fourth quarter Year • Grameenphone’s performance is driven by continued growth in (NOK in millions) 2017 2016 2017 2016 subscriptions and improved profitability through execution on Revenues efficiency initiatives. Subscription and traffic 2 793 2 818 10 685 11 891 • The number of subscriptions increased by 1.4 million during the quarter, taking the total base to 65 million. The subscription base Interconnect revenues 148 167 581 624 was 13% higher than fourth quarter last year. Other mobile revenues 33 29 132 116 • Total revenues increased by 8% as a result of 12% growth in mobile Non-mobile revenues 249 219 789 743 subscription and traffic revenues, partly offset by lower handset Total revenues 3 223 3 233 12 188 13 374 revenues. • EBITDA grew by 16% following continued gross profit uplift, partly Operating expenditures 977 996 3 720 4 044 offset by growth related opex and larger network footprint. EBITDA before other items 1 435 1 440 5 556 6 004 • Grameenphone continued to build upon their superior network Operating profit 1 013 1 092 4 035 4 682 position by prioritising capex towards network coverage and capacity. 3G population coverage was 93% at the end of 2017.

EBITDA before other items/ Total revenues (%) 44.5 44.5 45.6 44.9 Capex 323 469 2 570 1 581

No. of subscriptions - Change in quarter/ Total (in thousands): (106) 50 11 747 12 299 ARPU - monthly (NOK) 84 82 79 85 Exchange rate (MYR) 1.9222 2.0272 TELENOR FOURTH QUARTER 2017 9

Pakistan • In Myanmar, pressure from reduced voice usage and price reductions Fourth quarter Year implemented in the third quarter, resulted in revenue decline of 4%. 2017 2016 2017 2016 On the positive side, the subscription base grew by 0.4 million, taking (NOK in millions) Restated* Restated* the total base to 19.5 million, an increase of 7% from last year. Revenues • ARPU decreased by 10% as the decline in voice and interconnect, Subscription and traffic 1 603 1 612 6 644 6 315 was partly offset by data monetisation. Interconnect revenues 282 297 1 174 1 162 • EBITDA decreased by 9% as a result of the reduction in revenues combined with higher opex. The cost increase was primarily driven by Other mobile revenues 6 6 20 (25) a higher number of network sites and regulatory costs. Non-mobile revenues 117 62 342 247 • On 14 December Telenor Myanmar exercised the option to acquire Total revenues 2 008 1 976 8 181 7 698 additional 2x10MHz in the 1800 MHz frequency band at a cost of NOK 660 million. The spectrum will be used for 4G. The remaining Operating expenditures 715 840 2 788 3 050 capex in the quarter was mainly related to roll-out of 4G and EBITDA before other items 966 844 4 204 3 441 capacity expansion. Operating profit 552 470 2 678 2 166 Broadcast EBITDA before other items/ Fourth quarter Year Total revenues (%) 48.1 42.7 51.4 44.7 (NOK in millions) 2017 2016 2017 2016 Capex 532 621 1 438 4 898 Revenues Canal Digital DTH 1 152 1 098 4 557 4 555 No. of subscriptions - Change in quarter/ Satellite 215 234 892 955 Total (in thousands): 924 1 195 41 625 39 428 Norkring 267 280 1 095 1 333 ARPU - monthly (NOK) 15 16 16 17 Other/Eliminations (119) (116) (472) (477) Exchange rate (PKR) 0.0785 0.0802 Total revenues 1 516 1 495 6 071 6 366 * Refer to note 10. • Telenor Pakistan continued on a solid growth and profitability path with strengthened 4G position and improved cost efficiency. Operating expenditures 487 485 1 771 1 841 • The number of subscriptions increased by 0.9 million during the quarter, taking the total base to 42 million, which is 6% more than EBITDA before other items fourth quarter last year. Canal Digital DTH 195 153 844 782 • Total revenues increased by 6% mainly as a result of continued Satellite 135 158 585 650 subscription growth, a healthy increase in data revenues and higher Norkring 142 142 601 822 handset sales. Other/Eliminations (20) (7) (33) (23) • Opex decreased by 11% from solid execution on the efficiency agenda, despite having increased cost from subscriber growth and Total EBITDA before other items 451 446 1 997 2 231 network expansion. • EBITDA grew by 20% due to gross profit uplift and increased Operating profit contribution from the cost efficiency programme, resulting in an Canal Digital DTH 179 122 760 709 improvement in EBITDA margin of 5 percentage points. Satellite 55 71 613 313 • Capex was prioritised towards expanding both the 4G and 3G Norkring 69 59 300 377 network footprint. 4G population coverage was 38% at the end of Other/Eliminations (22) (11) (32) (29) 2017. Total operating profit 282 241 1 641 1 370

Myanmar EBITDA before other items/Total Fourth quarter Year revenues (%) 29.8 29.9 32.9 35.0 (NOK in millions) 2017 2016 2017 2016 Capex 139 135 409 412 Revenues Subscription and traffic 1 339 1 451 5 585 5 791 No. of subscriptions - Change in quarter/Total (in thousands): Interconnect revenues 229 269 941 1 104 DTH TV (6) (3) 838 862 Other mobile revenues 15 18 39 44 Non-mobile revenues 17 16 78 77 • Total revenues in Broadcast increased by 1%, while EBITDA Total revenues 1 599 1 754 6 643 7 016 remained stable. The revenue increase was primarily attributable to Canal Digital, and was partly offset by effects of shut-down of FM Operating expenditures 730 725 2 763 2 694 broadcasting in Norway. EBITDA before other items 622 718 2 869 3 038 • Opex and EBITDA were on level with the same quarter last year. Operating profit 347 474 1 796 2 156 • Capital expenditure was mainly related to infrastructure maintenance, roll-out of sites for mobile operators, expansion of the DAB network in Norway, and platform investments in Canal EBITDA before other items/ Total revenues (%) 38.9 40.9 43.2 43.3 Digital. Capex 1 285 783 2 545 2 729

No. of subscriptions - Change in quarter/ Total (in thousands): 376 439 19 474 18 255 ARPU - monthly (NOK) 27 32 29 35 Exchange rate (MMK) 0.0060 0.0067 10 TELENOR FOURTH QUARTER 2017

Other units Fourth quarter Year 2017 2016 2017 2016 (NOK in millions) Restated* Restated* Revenues Global wholesale 670 777 2 995 3 117 Corporate functions 830 667 3 179 2 933 Digital Businesses incl. Financial services 670 665 2 461 2 263 Other / eliminations 72 107 364 557 Total revenues 2 242 2 216 8 998 8 870

Operating expenditures 1 732 1 747 6 519 6 483

EBITDA before other items Global wholesale 28 14 135 120 Corporate functions (229) (357) (811) (1 125) Digital Businesses incl. Financial services (58) (127) (308) (295) Other / eliminations (12) (3) 19 34 Total EBITDA before other items (271) (473) (965) (1 266)

Operating profit (loss) Global wholesale 8 2 56 72 Corporate functions (313) (60) (712) (1 162) Digital Businesses incl. Financial services (1 791) (1 197) (2 731) (1 476) Other / eliminations (34) (26) 24 (18) Total operating profit (loss) (2 130) (1 281) (3 363) (2 585)

Capex 171 181 660 564 Investments in businesses 29 21 1 905 3 488 * Refer to note 10.

• In Global Wholesale, revenues decreased by NOK 107 million as volume related increase could not fully compensate for the drop in prices. EBITDA increased by NOK 14 million. • EBITDA in Corporate Functions improved due to lower costs in shared service centres. • In Digital Businesses, revenues remained flat in the quarter as growth in Financial Services and the inclusion of the Online Classifieds operations from 1 July was offset by decline in Tapad. EBITDA improved mainly due to improvement in financial services and cost reductions in Tapad. • Operating profit for Other Units decreased by NOK 0.8 billion mainly as a result of impairment in Tapad. See note 4 for further information. TELENOR FOURTH QUARTER 2017 11

Group performance 2017

The comments below are related to Telenor’s development in 2017 compared to 2016. Current quarter developments are commented on if considered material. Telenor India is classified as discontinued operation. Consequently, historical Group income statement has been re-presented accordingly. Please refer to note 2 for further information.

Specification of other income and other expenses

Fourth quarter Year (NOK in millions) 2017 2016 2017 2016 EBITDA before other income and other expenses 11 835 10 649 48 992 45 966 EBITDA before other income and other expenses (%) 36.9 33.6 39.3 36.7 Other income - - 140 - Gains on disposals of fixed assets and operations 56 478 1 171 528 Losses on disposals of fixed assets and operations (98) (457) (260) (593) Workforce reductions, onerous (loss) contracts and one-time pension costs (353) (395) (1 152) (853) EBITDA 11 441 10 275 48 891 45 049 EBITDA margin (%) 35.6 32.4 39.2 35.9

In the fourth quarter of 2017 ‘Other income and other expenses’ consisted mainly of: • Workforce reductions of NOK 224 million (Telenor Norway NOK 170 million). • Costs related to settlement of contracts in Grameenphone of NOK 133 million.

For the year 2017 ‘Other income and other expenses’ consisted mainly of: • Other income of NOK 140 million related to a positive settlement with a vendor. • Gains on disposals related to a finance lease agreement in Broadcast, divestment of ABC Startsiden and disposal of an office property in Kongensgate 8/Kirkegaten 9 in Oslo. • Workforce reductions in Telenor Norway, Corporate Functions, Grameenphone, Telenor Denmark and Broadcast. • Divestment of Telenor Banka and costs related to settlement of contracts in Grameenphone.

For the year 2016 ‘Other income and other expenses’ consisted mainly of: • Gain on disposal of an office property in Kongensgate 21 in Oslo. • Losses on disposals of fixed assets in Telenor Norway, Telenor Denmark, dtac and Group Functions. • Workforce reductions in Telenor Norway, Telenor Sweden, dtac, Grameenphone, Corporate Functions, Broadcast and Telenor Denmark.

Impairment • During 2017, a reversal of previous impairment of tangible and intangible assets related to our Danish operation of NOK 1.2 billion has been recognised. See note 4 for more information. • During 2017, an impairment of goodwill related to Tapad of NOK 1.7 billion has been recognised as a result of further weakening of Tapad’s US media advertising segment and lower-than-expected growth in the data segment. See note 4 for more information. • During 2017, an impairment of goodwill related to 701Search Pte Ltd. of NOK 0.4 billion has been recognised following the purchase of 66.7% ownership in the company from Schibsted ASA and Singapore Press Holdings.

Operating profit • Reported operating profit increased by NOK 2.4 billion to NOK 26.7 billion, from improved EBITDA, slightly offset by higher depreciations, primarily in Thailand.

Associated companies and joint ventures

Fourth quarter Year (NOK in millions) 2017 2016 2017 2016 Telenor's share of Profit after taxes 1 3 783 284 4 786 Amortisation of Telenor's net excess values - (6) (7) (23) Impairment losses (23) (2 334) 255 (3 246) Gains (losses) on disposal of ownership interests 2 (5) (5 148) (3 313) Profit (loss) from associated companies (20) 1 439 (4 617) (1 796)

• Profit after tax from associated companies and joint ventures during 2017 includes positive contribution from VEON of NOK 299 million recognised in the first quarter of 2017. • During 2017, reversal of impairment loss of NOK 284 million was recognised related to VEON. • Pursuant to the disposal of 70 million VEON ADSs on 7 April 2017, the Group no longer has significant influence over VEON and has discontinued recognising VEON as an associated company. Accordingly, the accumulated balance of currency translation losses previously recognised in other comprehensive income were reclassified to the income statement, amounting to a loss of NOK 8.5 billion. The reclassification effect did not impact the total equity of the Group. • On 11 May 2017, the Group entered into an agreement with Schibsted ASA to sell its ownership interest of 50% in SnT Classifieds for a cash consideration of NOK 4.3 billion. The transaction was closed on 30 June 2017, and a gain of NOK 3.1 billion was recognised on disposal of the Group’s ownership interest in SnT Classifieds. See note 5 for further information. • On 11 May 2017, the Group entered into an agreement with Schibsted ASA and Singapore Press Holdings to acquire 66.7% ownership interest in 701Search Pte Ltd. for a cash consideration of NOK 1.8 billion. Before this transaction, the Group held 33.3% ownership interest in 701Search Pte Ltd. The transaction was closed on 30 June 2017, and a gain of NOK 352 million was recognised related to the re-measurement of previously owned equity interest. See note 5 for further information. 12 TELENOR FOURTH QUARTER 2017

Financial items

Fourth quarter Year (NOK in millions) 2017 2016 2017 2016 Financial income 159 109 1 652 420 Financial expenses (746) (799) (3 061) (2 929) Net currency gains (losses) (1 126) (776) 1 036 (143) Net change in fair value of financial instruments 455 (230) 425 (558) Net gains (losses and impairment) of financial assets and liabilities (6) 7 (216) 1 Net financial income (expenses) (1 264) (1 690) (164) (3 209)

Gross interest expenses (612) (683) (2 599) (2 417) Net interest expenses (506) (629) (2 192) (2 229)

• Net currency losses in the fourth quarter of 2017 and net currency gains for the whole year is mainly caused by revaluation of debt positions in foreign currency. • Change in fair value of financial instruments in the fourth quarter of 2017 includes a gain on the derivative embedded in the VEON exchangeable bond. The recorded gain was NOK 345 million, compared to a loss of NOK 478 million in the same quarter last year. The full year effect was a gain of NOK 416 million. • Financial income for 2017 includes VEON dividends booked in the first three quarters with a total income equivalent to NOK 980 million.

Taxes • The underlying tax rate remains stable around 29%. The effective tax rate for the fourth quarter and for the year is 25% and 31%, respectively. • The effective tax rate for the year is higher than the underlying tax rate mainly due to the reclassification to the income statement of accumulated currency translation differences previously recognised in other comprehensive income, subsequent to the VEON public shares offering in April and the provision of NOK 486 million for tax on internal transfer of shares in Telenor Montenegro Gsm in 2013, partly offset by the tax exempt gain on the SnT Classified disposal and the reversal of the valuation allowance in Denmark. The effective tax rate for the fourth quarter is lower than the underlying tax rate explained by the mentioned reversal of the valuation allowance in Denmark. • The effective tax rate for the year 2018 is estimated to be around 30%.

Cash flow • Net cash inflow from operating activities during 2017 was NOK 42.0 billion, an increase of NOK 2.3 billion compared to 2016. The increase was mainly explained by higher EBITDA in Grameenphone, dtac, Sweden and Pakistan as well as dividends from VEON which was partly offset by changes in working capital, higher taxes paid and negative currency translation effects. • Net cash outflow to investing activities during 2017 was NOK 9.7 billion, a decrease of NOK 11.4 billion compared to 2016. This is mainly due to lower cash outflows related to purchases of PPE, intangible assets and licence investments of NOK 5.4 billion and acquisitions of subsidiaries of NOK 1.0 billion (NOK 1.8 billion for the acquisition of 701Search Pte. Ltd in 2017 and NOK 2.7 billion for the acquisition of Tapad Inc. in 2016), coupled with proceeds from sale of SnT Classifieds (NOK 4.3 billion), sale of property (NOK 0.9 billion) and higher proceeds from sale of VEON shares (NOK 0.4 billion) in 2017. • Net cash outflow to financing activities during 2017 was NOK 33.4 billion. This is explained by net payments of borrowings of NOK 12.6 billion, dividends paid to Telenor ASA shareholders and share buyback of NOK 13.3 billion, payments to minority interest of NOK 2.6 billion and payments under supply chain financing of NOK 3.9 billion. • Cash and cash equivalents decreased by NOK 0.6 billion during 2017 to NOK 22.3 billion as of 31 December 2017.

Financial position • During 2017, total assets decreased by NOK 4.6 billion to NOK 201.8 billion. • Net debt decreased by NOK 7.5 billion to NOK 46.9 billion. Interest-bearing liabilities excluding licence obligations decreased by NOK 9.4 billion, partially offset by the decrease in cash and cash equivalents of NOK 0.6 billion, fair value hedge instrument receivables of NOK 0.6 billion and fixed income investments of NOK 0.8 billion. • Total equity increased by NOK 6.9 billion to NOK 62.3 billion. This was mainly due to positive net income from operations of NOK 14.9 billion reduced by negative translation differences concerning VEON reclassified from other comprehensive income to the income statement of NOK 7.5 billion, with no net effect on equity, offset by dividends to equity holders of Telenor ASA and non-controlling interests of NOK 14.3 billion and share buyback of NOK 1.5 billion.

Transactions with related parties For detailed information on related party transactions refer to Note 32 in Telenor’s Annual Report 2016.

Risk and uncertainties The existing risks and uncertainties described below are expected to remain for the next three months.

A significant share of Telenor’s revenues and profits is derived from operations outside Norway. Currency fluctuations may influence the reported figures in Norwegian Kroner significantly. Political risk, including regulatory conditions, may also influence the results.

Telenor ASA seeks to allocate debt on the basis of equity market values in local currencies, predominantly EUR, USD and SEK. Foreign currency debt in Telenor ASA that exceeds the booked equity of investments in the same currency will not be part of an effective net investment hedge relationship. Currency fluctuations related to this part of the debt will be recorded in the income statement.

For additional explanations regarding risks and uncertainties, please refer to the Report of the Board of Directors for 2016, section Risk Factors and Risk Management, and Telenor’s Annual Report 2016 Note 13 Income taxes, Note 28 Managing Capital and Financial Risk Management and Note 33 Legal Disputes and Contingencies. Readers are also referred to the disclaimer at the end of this section.

TELENOR FOURTH QUARTER 2017 13

New developments of risks and uncertainties since the publication of Telenor’s Annual Report for 2016 are:

Legal disputes See note 8 for details.

Financial aspects In relation to the licence issuance in Myanmar, a performance bond of USD 110 million has been issued to Myanmar authorities as a guarantee towards coverage and quality of service commitments during the next two years of the licence.

Disclaimer This report contains statements regarding the future in connection with Telenor’s growth initiatives, profit figures, outlook, strategies and objectives. In particular, the section ‘Outlook’ contains forward-looking statements regarding the Group’s expectations. All statements regarding the future are subject to inherent risks and uncertainties, and many factors can lead to actual profits and developments deviating substantially from what has been expressed or implied in such statements.

Fornebu, 30 January 2018 The Board of Directors of Telenor ASA 14 TELENOR FOURTH QUARTER 2017

Interim condensed financial information

Consolidated income statement Telenor Group

Fourth quarter Year (NOK in millions except earnings per share) 2017 2016 2017 2016 Revenues 32 093 31 727 124 756 125 395 Costs of materials and traffic charges (8 630) (8 977) (31 039) (32 547) Salaries and personnel costs (3 331) (3 102) (12 802) (12 690) Other operating expenses (8 297) (8 999) (31 923) (34 192) Other income 56 478 1 311 528 Other expenses (451) (852) (1 412) (1 446) EBITDA 11 441 10 275 48 891 45 049 Depreciation and amortisation (5 589) (5 030) (21 257) (19 583) Impairment losses (468) (1 032) (895) (1 159) Operating profit 5 384 4 214 26 739 24 307 Share of net income from associated companies and joint ventures (23) 1 443 531 1 517 Gain (loss) on disposal of associated companies 2 (5) (5 148) (3 313) Net financial income (expenses) (1 264) (1 690) (164) (3 209) Profit before taxes 4 100 3 963 21 959 19 302 Income taxes (1 030) (910) (6 854) (5 924) Profit from continuing operations 3 070 3 052 15 105 13 378 Profit (loss) from discontinued operations (164) (140) (207) (7 572) Net income 2 906 2 911 14 898 5 806

Net income attributable to: Non-controlling interests 681 625 2 915 2 974 Equity holders of Telenor ASA 2 226 2 286 11 983 2 832

Earnings per share in NOK Basic from continuing operations 1.60 1.62 8.13 6.93 Diluted from continuing operations 1.60 1.62 8.13 6.93

Earnings per share in NOK Basic from discontinued operations (0.11) (0.09) (0.14) (5.04) Diluted from discontinued operations (0.11) (0.09) (0.14) (5.04)

Earnings per share in NOK Basic from total operations 1.49 1.52 7.99 1.89 Diluted from total operations 1.49 1.52 7.99 1.89

The interim financial information has not been subject to audit or review. TELENOR FOURTH QUARTER 2017 15

Consolidated statement of comprehensive income Telenor Group

Fourth quarter Year (NOK in millions) 2017 2016 2017 2016 Net income 2 906 2 911 14 898 5 806

Translation differences on net investment in foreign operations 2 184 1 697 2 296 (4 646) Income taxes (3) (12) - (15) Amount reclassified from other comprehensive income to income statement on partial disposal - - (7 744) (3 865) Income taxes reclassified - - - 256

Net gain (loss) on hedge of net investment (957) (1 406) (1 426) 2 734 Income taxes 230 351 342 (684) Amount reclassified from other comprehensive income to income statement on partial disposal - - 4 094 2 969 Income taxes reclassified - - (1 119) (816)

Net gain (loss) on available-for-sale-investment (466) (15) (848) (43) Amount reclassified from other comprehensive income to income statement on disposal - - 214 -

Share of other comprehensive income (loss) of associated companies and joint ventures (16) (30) (342) 631 Amount reclassified from other comprehensive income to income statement on disposal - - 12 282 4 783

Items that may be reclassified subsequently to income statement 972 586 7 750 1 305

Remeasurement of defined benefit pension plans (181) 448 (63) (304) Income taxes 28 (113) - 55

Items that will not be reclassified to income statement (153) 335 (63) (248)

Other comprehensive income (loss), net of taxes 819 921 7 687 1 056 Total comprehensive income 3 726 3 832 22 585 6 862

Total comprehensive income attributable to: Non-controlling interests 864 789 2 897 2 824 Equity holders of Telenor ASA 2 862 3 043 19 688 4 038

The interim financial information has not been subject to audit or review. 16 TELENOR FOURTH QUARTER 2017

Consolidated statement of financial position Telenor Group

31 December 31 December (NOK in millions) 2017 2016 Deferred tax assets 1 917 2 163 Goodwill 26 446 24 519 Intangible assets 30 601 33 057 Property, plant and equipment 75 557 72 016 Associated companies and joint ventures 480 15 773 Other non-current assets 13 297 5 800 Total non-current assets 148 298 153 328

Prepaid taxes 1 076 737 Inventories 1 773 1 802 Trade and other receivables 24 749 24 876 Other current financial assets 1 622 2 489 Assets classified as held for sale 1 701 2 Cash and cash equivalents 22 546 23 085 Total current assets 53 468 52 991 Total assets 201 765 206 319

Equity attributable to equity holders of Telenor ASA 57 496 50 879 Non-controlling interests 4 839 4 517 Total equity 62 335 55 396

Non-current interest-bearing liabilities 51 587 60 391 Non-current non-interest-bearing liabilities 1 105 3 816 Deferred tax liabilities 3 359 2 972 Pension obligations 2 565 2 585 Provisions and obligations 4 132 3 542 Total non-current liabilities 62 747 73 305

Current interest-bearing liabilities 22 710 25 970 Trade and other payables 40 295 42 890 Current tax payables 4 438 3 439 Current non-interest-bearing liabilities 3 253 3 642 Provisions and obligations 1 777 1 677 Liabilities classified as held for sale 4 210 - Total current liabilities 76 683 77 618 Total equity and liabilities 201 765 206 319

The interim financial information has not been subject to audit or review. TELENOR FOURTH QUARTER 2017 17

Consolidated statement of cash flows Telenor Group

Fourth quarter Year (NOK in millions) 2017 2016 2017 2016 Profit before taxes from total operations1) 3 936 3 822 21 751 11 731 Income taxes paid (2 398) (1 467) (6 100) (5 760) Net (gains) losses from disposals, impairments and change in fair value of financial assets and liabilities (517) 148 (1 212) 574 Depreciation, amortisation and impairment losses 6 057 6 281 22 166 28 033 Loss (profit) from associated companies and joint ventures 20 (1 439) 4 617 1 796 Dividends received from associated companies 1 122 24 130 Currency (gains) losses not related to operating activities 1 167 2 116 (1 072) 1 087 Changes in working capital and other 929 (394) 1 873 2 187 Net cash flow from operating activities 9 195 9 190 42 046 39 778

Purchases of property, plant and equipment (PPE) and intangible assets (4 518) (6 762) (18 361) (23 727) Purchases of subsidiaries, associated companies and joint ventures, net of cash acquired (11) (23) (2 000) (2 971) Proceeds from disposal of PPE, intangible assets, associated companies and businesses, net of cash disposed 30 573 7 511 5 412 Proceeds from sale and purchases of other investments 80 107 3 140 182 Net cash flow from investing activities (4 419) (6 106) (9 710) (21 105)

Proceeds from and repayments of borrowings (5 174) (1 229) (12 574) 10 582 Payments on licence obligations (92) (218) (973) (1 562) Payments on supply chain financing (1 000) (944) (3 909) (3 672) Share buyback by Telenor ASA (1 007) - (1 435) - Dividends paid to and purchases of shares from non-controlling interests (357) (413) (2 586) (3 139) Dividends paid to equity holders of Telenor ASA (5 238) (5 005) (11 944) (11 246) Net cash flow from financing activities (12 867) (7 809) (33 421) (9 037)

Effects of exchange rate changes on cash and cash equivalents 627 185 454 (446) Net change in cash and cash equivalents (7 464) (4 540) (632) 9 190 Cash and cash equivalents at the beginning of the period 29 782 27 490 22 951 13 760 Cash and cash equivalents at the end of the period2) 22 319 22 951 22 319 22 951 Of which cash and cash equivalents in discontinued operations at the end of the period 362 - 362 - Cash and cash equivalents in continuing operatins at the end of the period 21 957 22 951 21 957 22 951

1) Profit before taxes from total operations consists of: Profit before taxes from continuing operations 4 100 3 963 21 959 19 302 Profit before taxes from discontinued operations (164) (140) (207) (7 572) Profit before taxes from total operations 3 936 3 822 21 752 11 731

2) As of 31 December 2017, restricted cash was NOK 681 million, while as of 31 December 2016, restricted cash was NOK 654 million.

Cash flow from discontinued operations

Fourth quarter Year (NOK in millions) 2017 2016 2017 2016 Net cash flow from operating activities (548) 63 (648) 158 Net cash flow from investing activities (7) (334) (135) (1 306) Net cash flow from financing activities (63) (251) (198) (251)

The cash flows ascribed to discontinued operations are only cash flows from external transactions. Hence, the cash flows presented for discontinued operations do not reflect these operations as if they were standalone entities.

The interim financial information has not been subject to audit or review. 18 TELENOR FOURTH QUARTER 2017

Consolidated statement of changes in equity Telenor Group

Attributable to equity holders of the parent Cumulative Non- Total paid Other Retained translation controlling Total (NOK in millions) in capital reserves earnings differences Total interests equity Equity as of 1 January 2016 9 078 (21 143) 66 429 4 102 58 467 4 660 63 126 Net income for the period - - 2 832 - 2 832 2 974 5 806 Other comprehensive income for the period - 5 164 - (3 958) 1 206 (150) 1 056 Total comprehensive income for the period - 5 164 2 832 (3 958) 4 038 2 824 6 862 Transactions with non-controlling interests - (152) - - (152) (106) (258) Equity adjustments in associated companies and joint ventures - (239) - - (239) - (239) Dividends - - (11 261) - (11 261) (2 861) (14 122) Share - based payment, exercise of share options and distribution of shares - 28 - - 28 - 28 Equity as of 31 December 2016 9 078 (16 343) 58 000 144 50 879 4 517 55 396 Net income for the period - - 11 983 - 11 983 2 915 14 898 Other comprehensive income for the period - 11 247 - (3 542) 7 705 (18) 7 687 Total comprehensive income for the period - 11 247 11 983 (3 542) 19 688 2 897 22 585 Transactions with non-controlling interests - - - - - 67 67 Equity adjustments in associated companies and joint ventures - (539) 586 - 47 - 47 Dividends - - (11 694) - (11 694) (2 642) (14 335) Share buyback (52) (1 424) - - (1 476) - (1 476) Share - based payment, exercise of share options and distribution of shares - 52 - - 52 - 52 Equity as of 31 December 2017 9 025 (7 006) 58 875 (3 398) 57 496 4 839 62 336

The interim financial information has not been subject to audit or review. TELENOR FOURTH QUARTER 2017 19

Notes to the interim consolidated financial statements

Note 1 – General accounting principles Assets and liabilities held for sale Telenor (the Group) consists of Telenor ASA (the Company) and its In the statement of financial position as of 31 December 2017, Telenor subsidiaries. Telenor ASA is a limited liability company, incorporated India and Telenor Banka are classified as held for sale. in Norway. The condensed consolidated interim financial statements consist of the Group and the Group’s interests in associated companies The major classes of assets and liabilities of Telenor India classified as and joint arrangements. As a result of rounding differences, numbers or held for sale as of 31 December 2017: percentages may not add up to the total. (NOK in millions) 31 December 2017 Assets These condensed consolidated interim financial statements for the Intangible assets 261 year ending 31 December 2017, have been prepared in accordance Other non-current assets 326 with IAS 34 Interim Financial Reporting. The condensed consolidated interim financial statements do not include all the information and Inventory 2 disclosures required in the annual financial statements and should be Trade and other receivables 353 read in conjunction with the Group’s Annual financial statements 2016. Cash and cash equivalents 33 The accounting policies adopted in the preparation of the condensed Total assets classified as held for sale 975 consolidated interim financial statements are consistent with those followed in the preparation of the Group’s Annual Financial Statements Liabilities for the year ended 31 December 2016. Non-current liabilities 2 135 For information about the standards and interpretations effective from 1 Current liabilities 1 237 January 2017, please refer to Note 1 in the Group’s Annual Report 2016. Total liabilities held for sale 3 373 The standards and interpretations effective from 1 January 2017 do not have a significant impact on the Group’s consolidated interim financial (NOK in millions) Assets held for sale Liabilities held for sale statements. Telenor India 975 3 373 Telenor Banka 727 837 Total 1 701 4 210 Note 2 – Discontinued operations and held for sale Telenor India On 23 February 2017, the Group entered into a definitive agreement with Bharti Airtel Limited (Airtel), whereby Airtel will take full ownership Note 3 – Business combinations of Telenor India. According to the agreement, Airtel and Telenor India On 11 May 2017 Telenor ASA entered into an agreement with Schibsted will merge and Airtel will take over Telenor India as soon as all necessary ASA and Singapore Press Holdings regarding its joint ventures within approvals are received. As part of the agreement, Airtel will take over online classifieds, whereby Telenor acquired Schibsted’s and Singapore outstanding spectrum payments and other operational contracts, Press Holdings’ stakes of in total 66.7% in the joint venture 701Search including tower lease. Pte. Ltd, with operations in Malaysia, Vietnam and Myanmar, for NOK 1,753 million. The consideration was paid in cash and the transaction The transaction is subject to requisite regulatory approvals, including was closed 30 June 2017. approvals from the Department of Telecommunications in India (DoT) and the Competition Commission of India. The exposure to claims related Following these transactions, Telenor owns 100% of the shares in the to the period Telenor owned the business, will remain with Telenor. leading online classifieds services Mudah (Malaysia), Chotot (Vietnam), OneKyat (Myanmar) and ImSold (Malaysia and Vietnam). The transaction is expected to close within first quarter 2018. With effect from the first quarter of 2017, Telenor India is presented as Prior to the transaction with Schibsted and Singapore Press Holdings, discontinued operation in the consolidated income statement and Telenor held an interest of 33.3% in these companies which has been comparative periods are represented. In the consolidated statement of revalued to fair value as of the acquisition date and a gain of NOK 352 financial position 31 December 2017 Telenor India is classified as held million was recognised. The gain is classified as Gain (loss) on disposal of for sale. associates and joint ventures in the income statement.

The results of Telenor India for the fourth quarter of 2016 and 2017, the years 2016 and 2017 are presented below: Fourth quarter Year (NOK in millions) 2017 2016 2017 2016 Revenue 770 1 417 4 346 6 032 EBITDA (161) 192 (86) 54 Operating profit (161) (27) (100) (7 237) Profit before tax (164) (140) (207) (7 572) Income tax - - - - 20 TELENOR FOURTH QUARTER 2017

Key assumptions in determining the value in use: The fair values of the identifiable assets and liabilities of the business as Discount rate after tax, per cent 9.4 at the date of acquisition were: Discount rate before tax, per cent 11.9 Revenue growth, per cent1) 13.7

Fair values as of 2) (NOK in millions) acquisition date EBITDA growth, per cent 24.5 EBITDA margin growth, percentage points3) 2.1

Brand name 324 EBITDA margin in terminal year, per cent 25.0 Property, plant & equipment 11 Nominal growth rate in terminal value 2.5 Trade and other receivables 22 1) Represents the compound annual growth rate during 2018-2025 (until the terminal Cash and cash equivalents 49 year) in the base case scenario Total assets 406 2) Represents the compound annual growth rate during 2021-2025 (until the terminal year) in the base case scenario Deferred tax liability 78 3) Represents the annual growth from 2021–2025 (until the terminal year) in the base case scenario Non-current liabilities 2 Current liabilities 46 Total liabilities 127 Telenor Denmark In fourth quarter 2015 tangible and intangible assets in Telenor

Denmark was impaired with NOK 2.1 billion. The Danish telecom market Net identifiable assets 279 has been challenging with commoditization and low prices compared Goodwill 2 172 to most other western European countries. However, throughout 2017, Total consideration in cash for the shares 1 753 prices in the consumer segment have stabilized. The delivery and stabilization of the new business support system (BSS), launch of high Fair value of the Group’s equity interest in 701Search held speed broadband, significant cost savings and design of new simple before the business combination 698 business models and future organization during 2016 and 2017 has Sum 2 451 improved the performance in Telenor Denmark.

The goodwill of NOK 2,172 million comprises of customer base, not The recoverable amount of Telenor Denmark, based on approved qualifying as an identifiable intangible asset, and the businesses leading business plan and a value in use calculation, is significantly above the market positions in Malaysia and Vietnam. carrying amount and a reversal of NOK 1.2 billion related to tangible and intangible assets has been recognised. The reversal has been capped For the period between the date of acquisition and 31 December at the carrying amount that would have been determined had no 2017, 701Search contributed NOK 66 million to the Group’s revenue impairment loss been recognised in fourth quarter 2015. and NOK 388 million negatively to the Group’s profit before tax, including impairment of goodwill recognized in the second quarter. Had Key assumptions applied in the calculation of value in use for Telenor 701Search Pte. Ltd been consolidated from 1 January 2017, revenue Denmark as of 31 December 2017 are stated in the table below: and profit before taxes for the Group would have been NOK 124,816 Discount rate after tax, per cent 6.2 million and NOK 21,930 million, respectively. 701Search Pte. Ltd is Discount rate before tax, per cent 7.6 included in the segment Other units. ARPU in terminal year, NOK 153.8

1) Other business combinations Revenue growth, per cent 3.0 During the year 2017, the Group has acquired Network Services Nordic EBITDA margin growth, percentage points2) 2.3 AB in Sweden and Ucom AS in Norway for a cash consideration of NOK EBITDA margin in terminal year, per cent1) 17.0 315 million. A preliminary purchase price allocation has been performed, Nominal growth rate in terminal value, per cent 0.0 resulting in a recognised goodwill of NOK 274 million. 1) Represents the compound annual growth rate during 2018-2019 2) Represents the annual growth during 2018–2019 Note 4 – Impairment Tapad The recoverable amount of Telenor’s investment in Tapad has been Note 5 – Associated companies and joint ventures estimated based on discounted cash flows from current revenue VEON streams. As a result of further weakening of Tapad’s US media During 2017, the Group recognized its share of net income amounting to advertising segment and lower than expected growth in the data NOK 0.3 billion in the first quarter of 2017 and a reversal of impairment segment, an impairment of NOK 1.7 billion has been recognised in of NOK 284 million. Tapad, which is included in Other Units under Digital Businesses.The carrying amount of goodwill recognised in the Tapad acquisition has The share of other comprehensive income and equity adjustment was been fully impaired. The estimated recoverable amount of tangible and negative NOK 0.3 billion mainly related to VEON’s translation differences intangible asset in Tapad after impairment is NOK 0.4 billion. reclassified to income statement upon completion of WIND Italy joint venture transaction.

On 7 April 2017, the Group disposed of a portion of its ownership in VEON corresponding to 70 million VEON ADSs or approximately 4% of TELENOR FOURTH QUARTER 2017 21

the total share capital of VEON for a price of USD 3.70 per ADS after annually. The exchangeable bond is in the statement of financial transaction costs, resulting in net proceeds to the Group of NOK 2.2 position split into an interest-bearing liability recognised at amortised billion. After the disposal, Group’s ownership of VEON was reduced from cost and a financial derivative recognised at fair value. As of the 23.7% to 19.7%. placement date the carrying amount of the interest-bearing liability was NOK 7.9 billion (USD 956 million). Following the transaction, the Group lost its significant influence over VEON and no longer recognising VEON as an associated company. Each USD 200,000 bond is exchangeable for 44,322 VEON ADSs Accordingly, the accumulated balance of currency losses previously (adjusted for VEON dividend and subject to further adjustments), which recognised in other comprehensive income were reclassified to the represents an exchange price of approximately USD 4.51. The initial income statement, amounting to a net loss after tax of NOK 7.5 billion. exchange price represented a 40% premium to the reference equity The reclassification effect did not impact the total equity of the Group. offering price of USD 3.50 per ADS. Underlying the exchangeable bonds are approximately 222 million VEON ADSs (subject to certain As a consequence of loss of significant influence, the remaining VEON adjustments), corresponding to approximately 12.6% of VEON’s total ADSs and common shares were classified as a financial investment, share capital. under the heading “Other non-current assets” in the statement of financial position. VEON ADSs and common shares are categorized as Upon the maturity of the Bonds, the Issuer may redeem each USD an “available for sale” investment at fair value. Gains and losses arising 200,000 bond that has not been previously exchanged by paying cash, from changes in fair value are recognized in other comprehensive by transferring up to 66,483 ADSs (150% of 44,322 ADS underlying each income and are reclassified to income statement upon disposal. bond) or by paying and transferring a mix of cash and ADSs, in each case During 2017, total loss of NOK 0.9 billion was recognised in other with a market value of USD 200,000. comprehensive income. Additionally, Telenor may redeem the bonds at their USD 200,000 During the third quarter of 2017, the Group disposed of a further portion principal amount, together with accrued interest, for cash at any time of its ownership in VEON corresponding to 90 million VEON ADSs and on or after 12 October 2018 provided that the market value of the common shares or approximately 5% of the total share capital of VEON 44,322 VEON ADSs underlying each Bond is at least USD 260,000, for a price of USD 4.05 per share after transaction costs, resulting in net effectively encouraging bondholders to exercise their exchange right proceeds to the Group of NOK 2.8 billion. Loss of NOK 214 million was and accelerating Telenor’s divestment of its VEON ADSs. reclassified to income statement upon disposal of 90 million VEON ADSs and common shares. The loss was related to appreciation of Norwegian Following these transactions and assuming that 100% of the VEON kroner against USD. ADSs underlying the Bonds are delivered to bondholders at or before the Bond’s maturity in September 2019, Telenor’s residual stake in VEON SnT Classifieds would be 2.0% of VEON’s total share capital, equal to 35 million ADSs The Group had an ownership interest of 50% in SnT Classifieds which as of 31 December 2017. The Bonds are listed on the Open Market further owns 50% of the Latin American online classifieds joint ventures. (Freiverkehr) segment of Frankfurt stock exchange. On 11 May 2017, the Group entered into an agreement with Schibsted ASA to sell its ownership interest of 50% in SnT Classifieds for a cash Fair value of interest-bearing liabilities recognised at amortised cost: consideration of NOK 4.3 billion. The carrying amount of the Group’s 31 December 2017 31 December 2016 50% ownership interest before disposal was NOK 1.2 billion. The Carrying Fair Carrying Fair transaction was closed on 30 June 2017, and a gain of NOK 3.1 billion NOK in millions amount value amount value was recognised on the disposal after reclassification of accumulated Interest-bearing liabilities (74 296) (77 327) (86 361) (90 160) currency losses of NOK 60 million from other comprehensive income to of which fair value level 1 (58 556) (61 320) income statement. of which fair value level 2 (18 771) (28 840)

701Search Pte Ltd. The Group had an ownership interest of 33.3% in 701Search Pte Ltd. Note 7 – Fair value of financial instruments which owns online classified sites in Malaysia, Vietnam and Myanmar. On Financial derivatives are recognised at fair value based on observable 11 May 2017, the Group entered into an agreement with Schibsted ASA market data (level 2). See note 29 in the Annual Report 2016 for and Singapore Press Holdings to acquire 66.7% ownership interest in valuation methodologies. The financial derivatives are classified in the Search Pte Ltd. for a cash consideration of NOK 1.8 billion. The carrying consolidated statement of financial position as disclosed in the table: amount of the Group’s 33.3% ownership interest in Search Pte Ltd. was 31 December 31 December NOK 347 million before this transaction. As a result of this, the Group (NOK in millions) 2017 2016 re-measured its previously owned equity interest at an implied fair value Other non-current assets 2 430 2 951 arising from this transaction and recognised a gain of NOK 352 million Other current financial assets 707 725 during the second quarter of 2017. Non-current non-interest-bearing liabilities (953) (3 224) Current non-interest-bearing liabilities - (26) Note 6 – Interest-bearing liabilities Concurrently with the equity offering of the VEON ADSs on 15 Current interest-bearing liabilities (1 793) (1 843) September 2016, Telenor East Holding II AS, an indirectly wholly Total 391 (1 417) owned subsidiary of Telenor ASA (“Telenor”), placed USD 1,000 million aggregate principal amount of senior, unsecured bonds (the “Bonds”) exchangeable into VEON ADSs. The Bonds have an expected maturity life of 3 years and a fixed coupon of 0.25% per annum, payable semi- 22 TELENOR FOURTH QUARTER 2017

Note 8 – Legal disputes Grameenphone – Bangladesh Telenor Norway On 29 January 2018, the Board of Directors of Grameenphone Ltd. The Norwegian Competition Authority (NCA) and EFTA Surveillance proposed final dividend for 2017 of BDT 10.00 per share, which Authority (ESA) carried out an inspection of Telenor Norge AS on 4-13 corresponds to approximately NOK 1.3 billion total dividend and December 2012 based on suspected abuse of dominant position and/ approximately NOK 0.75 billion for Telenor ownership share. or anti-competitive collaboration concerning Telenor Norway’s mobile operation. On 23 November 2016, Norwegian Competition Authority dtac sent a Statement of Objection setting out its preliminary assessment of On 30 January 2018, the Board of Directors of Total Access Telenor’s behaviour in the mobile market; NCA is considering imposing Communication Public Company Limited (dtac) proposed annual a fine of NOK 906 million against Telenor for an alleged breach of dividend for 2017 of THB 0.24 per share which corresponds to competition law. Telenor submitted its response to the NCA on 7 April approximately NOK 143 million total dividend and approximately NOK 2017 in which it contests the allegations of having breached the 93 million for Telenor ownership share. competition law.

Telenor Sweden Note 10 – Segment information and reconciliation of EBITDA On 25 April, the European Commission has initiated an investigation before other income and other expenses on the premises of Telenor Sverige in Stockholm regarding possible Financial information related to Telenor Banka, previously reported abuse of a collective dominant market position and/or possible anti- as part of Telenor Montenegro and Serbia, Telenor Microfinance Bank competitive practices between mobile network operators in Sweden. including Easypaisa, previously reported as part of Telenor Pakistan is Similar investigations were simultaneously initiated towards other now reported as part of Other units. The segment information for 2016 Swedish mobile network operators. has been restated to reflect this.

Telenor Pakistan Daxcom AB, previously reported as part of Telenor Norway is now China Mobile Pak Ltd (with its brand name Zong) has filed a petition reported as part of Telenor Sweden. Daxcom AB delivers customer before the Islamabad High Court, whereby it challenges the legality of specific solutions in Sweden. The segment information for 2016 has the Telecommunication Policy 2015 (“Policy”) and the Policy Directive been restated to reflect this. (“Directive”) dated 26 April 2017, pursuant to which Telenor Pakistan has been granted the 4G License in 850 MHz spectrum. The primary Telenor Cloud Services AS, previously reported as part of Other units ground on which the petition has been filed is that, based on the is now reported as part of Telenor Norway. Telenor Cloud Services Supreme Court’s decision in a separate matter, allegedly the Policy and AS delivers internet-based services like webhosting, office tools the Directive did not receive the sanction of the Federal Government, (Office 365), messaging and communication solutions. The segment as constituted by the Prime Minister and the Federal Cabinet. Therefore, information for 2016 has been restated to reflect this. it is claimed by Zong that the Directive was not validly issued and therefore all decisions taken under the authority of the Directive have Telenor IT Partner A/S (TIP), previously reported as part of other units no legal effect. Telenor Pakistan was initially not a party to this case, is now reported as part of Telenor Denmark. TIP developed the new but has now joined the proceedings since it is the beneficiary of the business support system, now used by Telenor Denmark. The segment decisions taken under the Policy and the Directive. Telenor Pakistan has information for 2016 has been restated to reflect this. followed the spectrum auction process in a transparent manner and any decision by the Court against the Policy/Directive would be on account of procedural error by the Government of Pakistan and such a decision would be vigorously appealed by Telenor Pakistan.

Grameenphone SIM tax on replacement SIM cards case as referred in the Annual Report 2016 note 33 for the period July 2007 to December 2011. In July 2017 LTU-VAT issued a show-cause notice to Grameenphone relating to SIM tax on replacement SIMs, for the period July 2012 – June 2015. To the extent this Show Cause Notice could lead to a final Tax Demand, the total demand for the period from July 2007 to December 2011 and July 2012 to June 2015 may be up to NOK 1.4 billion, without interests. Grameenphone is preparing next course of action on the notice.

Note 9 – Events after the reporting period Telenor Hungary On 24 January 2018, the Hungarian competition authorities initiated an investigation on the premises of Telenor Hungary outside Budapest. The investigation pertains to network cooperation and allegations of anticompetitive behavior in relation to a frequency auction in 2014.

Digi – Malaysia On 23 January 2018, the Board of Directors og Digi declared the fourth interim dividend for 2017 of MYR 0.046 per share, which corresponds to approximately NOK 0.7 billion total dividend and approximately NOK 0.34 billion for Telenor ownership share. TELENOR FOURTH QUARTER 2017 23

The operations Fourth quarter EBITDA before other income and Total revenues of which internal other expenses1) Investments2) 2017 2016 Growth 2017 2016 2017 Margin 2016 Margin 2017 2016 (NOK in millions) Restated Restated Restated Restated Norway 6 723 6 697 0.4% 119 85 2 723 40.5% 2 643 39.5% 1 100 1 512 Sweden 3 514 3 090 13.7% 21 8 1 066 30.3% 615 19.9% 611 586 Denmark 1 380 1 309 5.5% 22 23 148 10.7% 184 14.0% 160 47 Hungary 1 237 1 094 13.0% 11 18 341 27.6% 294 26.9% 88 163 Bulgaria 871 827 5.2% 14 14 276 31.7% 287 34.6% 106 154 Montenegro & Serbia 1 049 924 13.5% 40 39 357 34.0% 306 33.1% 98 145 dtac - Thailand 5 033 5 086 (1.1%) 55 34 1 938 38.5% 1 599 31.4% 1 088 1 413 Digi - Malaysia 3 223 3 233 (0.3%) 5 9 1 435 44.5% 1 440 44.5% 323 469 Grameenphone - Bangladesh 3 190 3 194 (0.1%) - - 1 876 58.8% 1 752 54.9% 488 567 Pakistan 2 008 1 976 1.6% 37 16 966 48.1% 844 42.7% 532 621 Myanmar 1 599 1 754 (8.8%) 56 68 622 38.9% 718 40.9% 1 285 783 Broadcast 1 516 1 495 1.4% 55 51 451 29.8% 446 29.9% 139 135 Other units 2 242 2 216 1.2% 1 051 804 (271) nm (473) nm 200 203 Eliminations (1 492) (1 169) - (1 486) (1 169) (94) - (5) - (11) (5) Group 32 093 31 727 1.2% - - 11 835 36.9% 10 649 33.6% 6 208 6 793

Full year EBITDA before other income and Total revenues of which internal other expenses1) Investments2) 2017 2016 Growth 2017 2016 2017 Margin 2016 Margin 2017 2016 (NOK in millions) Restated Restated Restated Restated Norway 25 926 26 030 (0.4%) 394 326 11 114 42.9% 10 946 42.1% 5 203 4 880 Sweden 12 938 12 384 4.5% 61 68 4 136 32.0% 3 538 28.6% 1 803 1 560 Denmark 5 147 5 068 1.6% 88 114 849 16.5% 609 12.0% 651 531 Hungary 4 634 4 436 4.5% 43 61 1 503 32.4% 1 369 30.9% 309 390 Bulgaria 3 220 3 168 1.7% 61 44 1 179 36.6% 1 191 37.6% 221 320 Montenegro & Serbia 3 903 3 835 1.8% 180 171 1 456 37.3% 1 395 36.4% 321 490 dtac - Thailand 19 089 19 647 (2.8%) 99 103 7 413 38.8% 6 645 33.8% 4 027 4 835 Digi - Malaysia 12 188 13 374 (8.9%) 22 22 5 556 45.6% 6 004 44.9% 2 570 1 581 Grameenphone - Bangladesh 13 156 12 339 6.6% 1 1 7 791 59.2% 6 829 55.3% 1 502 2 259 Pakistan 8 181 7 698 6.3% 123 75 4 204 51.4% 3 441 44.7% 1 438 4 898 Myanmar 6 643 7 016 (5.3%) 235 255 2 869 43.2% 3 038 43.3% 2 545 2 729 Broadcast 6 071 6 366 (4.6%) 220 180 1 997 32.9% 2 231 35.0% 409 412 Other units 8 998 8 870 1.5% 3 779 3 416 (965) nm (1 266) nm 2 565 4 052 Eliminations (5 337) (4 835) - (5 307) (4 835) (110) - (5) - (25) (5) Group 124 756 125 395 (0.5%) - - 48 992 39.3% 45 966 36.7% 23 538 28 930

1) The segment profit is EBITDA before other income and other expenses. 2) Investments consist of capex and investments in businesses.

Reconciliation

Fourth quarter Year

(NOK in millions) 2017 2016 2017 2016 EBITDA 11 441 10 275 48 891 45 049 Other income 56 478 1 311 528 Other expenses (451) (852) (1 412) (1 446) EBITDA before other income and other expenses 11 835 10 649 48 992 45 966 24 TELENOR FOURTH QUARTER 2017

Definitions

Alternative performance measures

Telenor Group’s financial information is prepared in accordance with international financial reporting standards (IFRS). In addition it is management’s intent to provide alternative performance measures that are regularly reviewed by management to enhance the understanding of Telenor’s performance, but not instead of, the financial statements prepared in accordance with IFRS. The alternative performance measures presented may be determined or calculated differently by other companies.

Organic revenue growth Organic revenue is defined as revenue adjusted for the effects of acquisition and disposal of operations and currency effects. We believe that the measure provides useful and necessary information to investors and other related parties for the following reasons: • it provides additional information on underlying growth of the business without the effect of certain factors unrelated to its operating performance; • it is used for internal performance analysis; and • it facilitates comparability of underlying growth with other companies (although the term “organic” is not a defined term under IFRS and may not, therefore, be comparable with similarly titled measures reported by other companies).

Reconciliation Change fourth quarter Change YoY Change fourth quarter Change YoY Change full year Change YoY (NOK in millions) 2017 2016 2017 Reported revenue growth 367 1.2% (325) (1.0%) (639) (0.5%) Impact using exchange rates for 2017 (314) 683 1 746 M&A (200) (181) (250) Organic revenue growth (148) (0.5%) 176 0.6% 857 0.7%

Organic subscription and traffic revenue growth Subscription and traffic revenues consist of revenues from mobile subscription and traffic, fixed telephony, fixed Internet/TV, fixed data services and Canal Digital DTH.

Organic subscription and traffic revenues are defined as subscription and traffic revenues adjusted for the effects of acquisition and disposal of operations and currency effects. We believe that the measure provides useful and necessary information to investors and other related parties for the following reasons: • it refers to the core revenue streams of the business making up more than 75% of total revenues and almost the entire gross profit for the Group; • it provides additional information on underlying growth of the business within these core revenue streams, without the effect of certain factors unrelated to its operating performance; • it is used for internal performance analysis; and • it facilitates comparability of underlying growth with other companies (although neither “subscription and traffic revenues” nor the term “organic” are defined terms under IFRS and may not, therefore, be comparable with similarly titled measures reported by other companies).

Reconciliation Change fourth quarter Change YoY Change fourth quarter Change YoY Change full year Change YoY (NOK in millions) 2017 2016 2017 Reported subscription and traffic revenue growth 818 3.5% (359) (1.5%) 559 0.6% Impact using exchange rates for 2017 (214) 547 1 523 M&A - - - Organic subscription and traffic revenue growth 604 2.6% 188 0.8% 2 081 2.2%

Subscription and traffic revenues

Fourth quarter Year (NOK in millions) 2017 2016 2017 2016 Mobile subscription and traffic 19 817 19 141 78 763 78 379 Fixed telephony 455 549 1 951 2 329 Fixed Internet/TV 2 306 2 142 8 880 8 333 Fixed data services 181 162 697 674 Canal Digital DTH 1 141 1 089 4 513 4 528 Subscription and traffic revenues 23 900 23 082 94 803 94 245 Other revenues 8 193 8 644 29 953 31 151 Total revenues 32 093 31 727 124 756 125 395 TELENOR FOURTH QUARTER 2017 25

Operating expenditures (opex) Operating expenditures (opex) is a key financial parameter for Telenor and is derived directly from the income statement, consisting of salaries and personnel cost and other operating expenses. Telenor’s continuous effort to improve efficiencies makes opex a key financial parameter to follow. It is also used for internal performance analysis.

Fourth quarter Year (NOK in millions) 2017 2016 2017 2016 Salaries and personnel cost (3 331) (3 102) (12 802) (12 690) Other operating expenditures (8 297) (8 999) (31 923) (34 192) Operating expenditures (11 628) (12 101) (44 725) (46 882)

EBITDA before other income and other expenses Earnings before interest, tax, depreciations and amortisations (EBITDA) is a key financial parameter for Telenor. EBITDA before other income and other expenses is defined as EBITDA less gains and losses on disposals of fixed assets and operations, workforce reductions, onerous contracts and one-time pension costs, and is reconciled in the section Group overview. This measure is useful to users of Telenor’s financial information in evaluating operating profitability on a more variable cost basis as it excludes depreciations and amortisation expense related primarily to capital expenditures and acquisitions that occurred in the past, non-recurring items, as well as evaluating operating performance in relation to Telenor’s competitors.

The EBITDA margin presented is defined as EBITDA before other income and other expenses divided by total revenues.

Organic EBITDA growth Organic EBITDA growth is defined as EBITDA (before other income and other expenses) adjusted for the effects of acquisition and disposal of operations and currency effects. We believe that the measure provides useful and necessary information to investors, and other related parties for the following reasons: • it provides additional information on underlying growth of the business without the effect of certain factors unrelated to its operating performance; • it is used for internal performance analysis.

Reconciliation Change fourth quarter Change YoY Change fourth quarter Change YoY Change full year Change YoY (NOK in millions) 2017 2016 2017 Reported revenue growth 1 186 11.1% (153) (1.4%) 3 026 6.6% Impact using exchange rates for 2017 (31) 249 867 M&A 20 89 86 Organic revenue growth 1 175 11.0% 185 1.7% 3 978 8.8%

Capital expenditures Capital expenditures (capex) are investments in tangible and intangible assets, excluding business combinations and asset retirement obligations. Capex is a measure of investments made in the operations in the relevant period and is useful to users of Telenor’s financial information in evaluating the capital intensity of the operations. Capex is deemed to better gauge the actual investments committed in the period than in the purchases of property, plant and equipment (PPE) and intangible assets in the cash flow statement.

Fourth quarter Year (NOK in millions) 2017 2016 2017 2016 Purchases of PPE and intangible assets (cash flow statement) 4 518 6 762 18 361 23 727 Working capital movement in respect of capital expenditure 2 011 35 3 305 2 500 Less: Asset retirement obligations (373) 94 (377) 32 Discontinued operations - 119 (3) (917) Capital expenditures 6 156 6 772 21 286 25 342 Licence and spectrum fee - capitalised (668) (4) (3 052) (3 504) Capital expenditures excluding licence and spectrum fee 5 488 6 768 18 235 21 838 Revenue 32 093 31 727 124 756 125 395 Capex excl. Licences and spectrum/Revenues (%) 17.1% 21.3% 14.6% 17.4 % 26 TELENOR FOURTH QUARTER 2017

Investments in businesses (business combinations) Investments in businesses comprise acquisitions of shares and participations, including acquisitions of subsidiaries and businesses not organised as separate companies.

Net interest-bearing debt excluding licence obligations (Net debt) Net debt consists of both current and non-current interest-bearing liabilities, excluding licence obligations, less related current and non-current hedging instruments, financial instruments, such as debt instruments and derivatives, and cash and cash equivalents.

Net debt is a measure of the Group’s net indebtedness that provides an indicator of the overall balance sheet strength. It is also a single measure that can be used to assess both the Group’s cash position and its indebtedness. The use of the term ‘net debt’ does not necessarily mean that the cash included in the net debt calculation is available to settle the liabilities included in this measure.

Net debt is considered to be an alternative performance measure as it is not defined in IFRS. The most directly comparable IFRS measure is the aggregate interest-bearing liabilities (both current and non-current) and cash and cash equivalents. A reconciliation from these to net debt is provided below. (NOK in millions) 31 December 2017 31 December 2016 Non-current interest-bearing liabilities 51 587 60 391 Current interest-bearing liabilities 22 710 25 970 Less: Cash and cash equivalents (22 546) (23 085)

Adjustments: Licence obligations (2 257) (4 884) Hedging instruments (1 777) (2 329) Financial instruments (849) (1 683) Net interest-bearing debt excluding licence obligations 46 868 54 381

Free cash flow Free Cash Flow is defined as net cash flow from operating activities plus net cash flow from investing activities, less dividends paid to and purchases of shares from non-controlling interest, payments in Supply Chain Financing programmes (classified as repayments of borrowings) and payments on interest-bearing licence obligations.

Free Cash Flow is a useful measure of Telenor’s liquidity and ability to generate cash through operations.

Reconciliation Fourth quarter Year (NOK in millions) 2017 2016 2017 2016 Net cash flows from operating activities 9 195 9 190 42 046 39 778 Net cash flows from investing activities (4 419) (6 106) (9 710) (21 105) Repayments of borrowings - licence obligations (92) (218) (973) (1 562) Repayments of borrowings - supply chain financing (1 000) (944) (3 909) (3 672) Dividends paid to and purchase of shares from non-controlling interest (357) (413) (2 586) (3 139) Free cash flow 3 327 1 509 24 867 10 300 TELENOR FOURTH QUARTER 2017 27

Mobile operations

Revenues Mobile subscription and traffic Consist of subscription and connection fees, revenues from voice (outgoing traffic) and non-voice traffic, outbound roaming and other mobile service revenues. Subscription and traffic includes only revenues from the company’s own subscriptions.

Interconnect Consist of revenues from incoming traffic related to the company’s own subscriptions. Revenues from incoming traffic related to service provider or MVNO subscriptions are not included.

Other mobile Consist of inbound roaming, national roaming, telemetric and revenues related to service providers and MVNOs (Mobile Virtual Network Operators). Telemetric is defined as machine-to-machine SIM cards (M2M), for example vending machines and meter readings.

Non-mobile Consist of revenues from customer equipment and businesses that are not directly related to mobile operations.

Mobile revenues from company’s own subscriptions Consist of ‘Mobile subscription and traffic’ and ‘Interconnect’ and do not include revenues from inbound roaming, national roaming, service providers, MVNOs, sale of customer equipment and incoming traffic related to service provider subscriptions.

Key Figures Subscriptions Contract subscriptions are counted until the subscription is terminated or until there has been no revenues or outgoing/incoming traffic during the last three months. Prepaid subscriptions are counted as active if there has been outgoing or incoming traffic or if the SIM card has been reloaded during the last three months. Service provider and MVNO subscriptions are not included. Data only SIM cards are included, but SIM cards used for telemetric applications and twin/multi SIM cards are excluded. Total subscriptions are voice SIM cards plus data only SIM cards used for mobile broadband.

Active mobile internet users Active mobile internet users are subscriptions with at least 150 KB of data during the last three months.

Average traffic minutes per subscription per month (AMPU) Traffic minutes per subscription per month are calculated based on total outgoing and incoming rated minutes from the company’s own subscriptions less data only subscriptions. This includes zero rated minutes and outgoing minutes from own subscriptions while roaming. Outgoing and incoming minutes related to inbound roaming, national roaming, service providers and MVNOs are not included.

Average revenue per subscription per month (ARPU) ARPU is calculated based on mobile revenues from the company’s own subscriptions, divided by the average number of subscriptions for the relevant period. 28 TELENOR FOURTH QUARTER 2017

Fixed operations

Revenues Telephony Consist of subscription and connection fees, traffic (fixed to fixed, fixed to mobile, to other countries, value added services, other traffic) for PSTN/ ISDN and Voice over Internet Protocol (VoIP).

Internet and TV Consist of subscription, traffic charges and connection fees for xDSL, cable and fibre, in addition to revenues from TV services. High speed fixed internet include fibre, cable and VDSL.

Data services Consist of Nordic Connect/IP-VPN and security.

Other Consist of leased lines, managed services and other retail products.

Wholesale Consist of sale to service providers of telephony (PSTN/ISDN), Bitstream, LLUB, national and international interconnect, transit traffic, leased lines and other wholesale products.

Key Figures Subscriptions Telephony consists of PSTN, ISDN and VoIP subscriptions. Internet consists of broadband access over xDSL, fibre and cable. TV consists of TV services over fibre and cable. Subscriptions are counted until the subscription is terminated.

Average revenue per subscription per month (ARPU) ARPU is calculated based on revenues from the company’s own subscriptions, divided by the average number of subscriptions for the relevant period. Internet ARPU is calculated based on Internet revenues as defined above except TV service revenues. TV ARPU is calculated based on revenues from TV services.

Broadcast Revenues Canal Digital DTH Consist of revenues from Nordic DTH subscribers and households in SMATV networks.

Satellite Consist of revenues from satellite services from the satellite position 1-degree west.

Norkring Consist of revenues from terrestrial radio and TV transmission in Norway and Belgium. Fourth quarter 2017 Published by Telenor ASA N-1360 Fornebu, Norway Phone: +47 67 89 00 00 2181027 • Bolt Communication AS • boltcommunication.no 2181027 • Bolt Communication

Investor Relations: E-mail: [email protected] www.telenor.com